No tour of Middle East conflict zones could be complete without a stop at Sderot, an Israeli town of 24,000 that stands uncomfortably close to the Gaza Strip. The rain of rockets out of the Palestinian enclave has made Sderot famous for two things: the thickness of its roofs (even bus stops have reinforced concrete tops); and the collection of crumpled missiles arrayed in racks behind the police station. As a visiting VIP in 2008, U.S. Senator Barack Obama dutifully inspected what the machine shops of Islamic Jihad and Hamasfashioned from lengths of pipe and scrap metal. Low-tech doesn’t begin to cover it.

It’s a long way up the Mediterranean coast from Sderot to Haifa, and even farther to the showroom of Rafael Advanced Defense Systems Ltd., the weapons-development branch of Israel’s military-industrial complex. Hi-tech doesn’t begin to cover it. Rafael developed the first precision-guided munitions — the precursor to the American-made Joint Direct Attack Munitions that replaced “dumb bombs” — and scores of other battlefield innovations, from IED detectors to floating drones. But the company’s most acclaimed invention is the one now President Obama will inspect moments after arriving in Israel on Wednesday: Iron Dome. It is a missile-interception system that has performed what Israelis regard as a miracle, draining a good bit of the fear out of the wail of an air-raid siren. During the last Gaza conflict, which lasted a week in November, Iron Dome knocked out of the sky a reported 84% of the missiles it aimed at — that is, the ones headed toward population centers. The rockets headed for open space its computers simply let fall. Rafael executives are understandably proud of Iron Dome, which after a few months on the job is performing at the level of a system that’s had seven years to work out the kinks. But they appear even prouder of the unlikely philosophy behind it. To make the most-tested, if not the most effective antimissile system in military history, Israeli engineers took a page from the Gaza militants they aimed to frustrate. The secret to Iron Dome is that it’s cheap.

Consider the problem of volume. Since 2005, Gaza militants have fired more than 4,000 of their homemade rockets into Israel. Most cost a few hundred dollars each. Interceptors typically cost a few hundred thousand. “The main question that everyone asks is, ‘You’re firing a very costly missile against something very cheap,'” says Joseph “Yossi” Horowitz, a retired air-force colonel who markets air-and-missile defense systems at Rafael. “So our main mission was to reduce the cost.”

The economizing would be across the board, but the biggest savings were realized by reducing the size of the missile’s eyes — by far the most expensive component. An interceptor missile locks onto its target by following directions from the radar in its nose cone, typically packed with radio-frequency sensors of extravagant unit cost. An interceptor carried by a fighter jet has to be very smart, because it’s expected to find a missile being fired in its direction before it’s even in sight, one that could come from any direction. The nose-cone radar of an AIM/AMRAAM has so many RFs, or radio-frequency nodes, that it runs into the hundreds of thousands of dollars.

But a homemade missile coming out of Gaza is simply ballistic: it goes up and comes down. Rafael realized its launch and trajectory can be detected by ground radar, which would then transmit that information to the Iron Dome interceptor launched into the area of the sky where it’s headed. Only when the two missiles come near one another does the interceptor’s own radar come alive, guiding it to the incoming Qassam or GRAD and colliding with its own nose — where the warhead is positioned — in midair. It’s a delicate business, what with each missile traveling at 700 m per second.

“I can bring the interceptor in an accurate way, near the target, which means I can use the radar, the ‘seeker’ for a very short time,” says Horowitz. The shorter the time, the fewer the RF sensors required. “Saves money,” he says. How much? “Two digits: from hundreds of thousands of dollars to several thousand dollars.”

The savings mount up. Most guided missiles are made of so-called exotic materials, complex polymers designed to prevent the rocket from expanding or contracting as it travels through different altitudes. Again, not necessary for Iron Dome, which ascends only a few thousand feet. “Here we did it with aluminum,” Horowitz says. “Went across the street. Got some pipe.”

The result is visible in this extraordinary YouTube video from a wedding in Beersheba, an Israeli city of 200,000. The incoming missiles are not visible in the night sky until the ascending Iron Dome interceptors find and destroy them — again and again and again. “We can do more, but in this video we do 12,” says Horowitz, a reserve colonel in the Israeli military’s air-defense section. “You are not looking for the best of the best. You are looking for some optimization.”

At about $50 million per battery — the launchers with 20 missiles each, ground radar and command-and-control center, led by an officer equipped with an abort button — Iron Dome still costs plenty, especially since Israel estimates it would need at least 13 of them to protect the entire country. It currently has five. But the U.S. Congress voted about $300 million to help close the gap, which is why the Israel Defense Forces will truck a battery to Ben Gurion Airport on Wednesday to be photographed behind the American President.

That no previous antimissile system has performed so impressively might raise awkward questions about the norms of defense procurement in other nations. (For David’s Sling, the Israeli version of the Patriot 3, the U.S. intermediate-range interceptor that costs about $5 million per interceptor, Rafael is partnering with Raytheon, an American firm, and still aims do the job for one-quarter of the cost.) But for Israelis, the more pressing question is how to define success.

Back to the Beersheba wedding. The revelry appears to carry on oblivious to the wail of air-raid sirens competing with the DJ (that song in the background is “Sunday Morning” by Maroon 5). If Israelis no longer scramble to shelters, then Iron Dome really has changed the dynamic. It’s not yet at that point; schools still close when the rockets fly, and parents stay home from work. But Rafael’s head of research and development, who began work on Iron Dome even before the government thought to ask for it, tells TIME that its overarching accomplishment is that it can break the pernicious cycle of escalation that can lead to things like invasions. The batteries can liberate Israel’s elected leaders from the public pressure that comes with mass casualties. “The big success of Iron Dome is not how many missiles we intercept,” says Roni Potasman, the executive vice president for R&D. “The main success is what happened in the decisionmaking civilian population environment. The quiet time. Clausewitz used to say the mission of the military is to provide the time for the decisionmakers to decide. Now, if out of 500 missiles, 10 of them get by and cause casualties, a school or kindergarten, then this is a whole different story.”

The more stubborn problem is that, even though Iron Dome knocked down 400 of the rockets fired out of Gaza in the last round of fighting, Hamas acts as though it prevailed in the conflict. What’s more, polls show 80% of Palestinians think so too, while only 1 in 4 Israelis think their side prevailed. Israeli warplanes killed scores of senior militants and destroyed hundreds of missiles and launchers on the ground, including Fajr-5 from Iran. But Hamas and Islamic Jihad still launched their own version of the Fajr, dubbed the M-75, toward Tel Aviv and Jerusalem — unsettling Israelis who had previously considered themselves out of range and had not heard an air-raid siren since the Gulf War.

“[Gaza militants] were hit badly, much more than four years ago, but still I think they perceive it as a success,” says Potasman. “This is the Middle East….one side is looking at this reality from one angle; the other side looks from a totally opposite angle. That’s why we cannot communicate with them on a regular, normal basis, because you see one reality, and you look at this and you say, ‘Hey, what else can we do, to kill them? I mean, to kill them softly?’ And they look at this and they say, ‘Hey, we were able to hit Beersheba and Jerusalem and Tel Aviv. So our understanding of the reality and their understanding of the reality is totally different. It’s not the same book.”

Karl Vick has been TIME's Jerusalem bureau chief since 2010, covering Israel,the Palestine territories and nearby sovereignties. He worked 16 years at the Washington Post in Nairobi, Istanbul, Baghdad, Los Angeles and Rockville, MD.